MIS-1-share broking in information system

7/28/2019 MIS-1-share broking in information system

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1.1) Introduction to stock marketHistory of Indian Stock Market: Indian stock market marks to be one of the oldest stock market in Asia. It dates

back to the close of 18th century when the East India Company used to transact loan securities. In the 1830s

trading on corporate stocks and shares in Bank and Cotton presses took place in Bombay. Though the trading

was broad but the brokers were hardly half dozen during 1840 and 1850.

An informal group of 22 stockbrokers began trading under a banyan tree opposite the Town Hall of Bombay

from the mid-1850s, each investing a (then) princely amount of Rupee 1. This banyan tree still stands in the

Horniman Circle Park, Mumbai. In 1860, the exchange flourished with 60 brokers. In fact the 'Share Mania' in

India began with the American Civil War broke and the cotton supply from the US to Europe stopped. Further

the brokers increased to 250. The informal group of stockbrokers organized themselves as the The Native Share

and Stockbrokers Association which, in 1875, was formally organized as the Bombay Stock Exchange (BSE).

BSE was shifted to an old building near the Town Hall. In 1928, the plot of land on which the BSE building

now stands (at the intersection of Dalal Street, Bombay Samachar Marg and Hammam Street in downtown

Mumbai) was acquired, and a building was constructed and occupied in 1930.

Premchand Roychand was a leading stockbroker of that time, and he assisted in setting out traditions,

conventions, and procedures for the trading of stocks at Bombay Stock Exchange and they are still being

followed.

Several stock broking firms in Mumbai were family run enterprises, and were named after the heads of the

family.

The following is the list of some of the initial members of the exchange, and who are still running their

respective business: D.S. Prabhudas & Company (now known as DSP, and a joint venture partner with MerrillLynch)

Jamnadas Morarjee (now known as JM)

Champaklal Devidas (now called Cifco Finance)

Brijmohan Laxminarayan


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In 1956, the Government of India recognized the Bombay Stock Exchange as the first stock exchange in the

country under the Securities Contracts (Regulation) Act.

The most decisive period in the history of the BSE took place after 1992. In the aftermath of a major scandal

with market manipulation involving a BSE member named Harshad Mehta, BSE responded to calls for reformwith intransigence. The foot-dragging by the BSE helped radicalise the position of the government, which

encouraged the creation of the National Stock Exchange (NSE), which created an electronic marketplace. NSE

started trading on 4 November 1994. Within less than a year, NSE turnover exceeded the BSE. BSE rapidly

automated, but it never caught up with NSE spot market turnover. The second strategic failure at BSE came in

the following two years. NSE embarked on the launch of equity derivatives trading. BSE responded by political

effort, with a friendly SEBI chairman (D. R. Mehta) aimed at blocking equity derivatives trading. The BSE and

D. R. Mehta succeeded in delaying the onset of equity derivatives trading by roughly five years. But this

trading, and the accompanying shift of the spot market to rolling settlement, did come along in 2000 and 2001 -

helped by another major scandal at BSE involving the then President Mr. Anand Rathi. NSE scored nearly

100% market share in the runaway success of equity derivatives trading, thus consigning BSE into clearlysecond place. Today, NSE has roughly 66% of equity spot turnover and roughly 100% of equity derivatives

turnover. Stock Exchange provides a trading platform, where buyers and sellers can meet to transact in

securities.


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1.2) Introduction to BSEAs we read in the history of Indian stock exchange; the stock exchange, Mumbai, popularly known as "BSE".

BSE was established in 1875 as "The Native Share and Stock Brokers Association". It is the oldest one in Asia,

even older than the Tokyo Stock Exchange, which was established in 1878. It is a voluntary non-profit making

Association of Persons (AOP) and has converted itself into demutualised and corporate entity. It has evolved

over the years into its present status as the Premier Stock Exchange in the country. It is the first Stock Exchange

in the Country to have obtained permanent recognition in 1956 from the Govt. of India under the Securities

Contracts (Regulation) Act, 1956.

The Exchange, while providing an efficient and transparent market for trading in securities, debt and derivatives

upholds the interests of the investors and ensures redresses of their grievances whether against the companies or

its own member-brokers. It also strives to educate and enlighten the investors by conducting investor education

programmers and making available to them necessary informative inputs.

A Governing Board having 20 directors is the apex body, which decides the policies and regulates the affairs ofthe Exchange. The Governing Board consists of 9 elected directors, who are from the broking community (one

third of them retire every year by rotation), three SEBI nominees, six public representatives and an Executive

Director & Chief Executive Officer and a Chief Operating Officer.

The Executive Director as the Chief Executive Officer is responsible for the day-to-day administration of

the Exchange and he is assisted by the Chief Operating Officer and other Heads of Department

The exchange has inserted new rule in its rules, bye-laws & regulations pertaining to constitution of theexecutive committee of the exchange. Accordingly, an executive committee, consisting of three elected

directors, three SEBI nominees or public representatives, executive director & ceo and chief operating officer

has been constituted. the committee considers judicial & quasi matters in which the governing board has powers

as an appellate authority, matters regarding annulment of transactions, admission, continuance and suspension

of member-brokers, declaration of a member-broker as defaulter, norms, procedures and other matters relating

to arbitration, fees, deposits, margins and other monies payable by the member-brokers to the exchange, etc.


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1.2.1) Timeline of BSE

1830s Business on corporate stocks and shares in Bank and Cotton presses started in Bombay.

1860-1865 Cotton price bubble as a result of the American Civil War

1870 90s Sharp increase in share prices of jute industries followed by a boom in tea stocks and coal

1978-79 Base year of Sensex, defined to be 100.

1986 Sensex first compiled using a market Capitalization-Weighted methodology for 30 component stocks

representing well-established companies across key sectors.

30 October 2006 The Sensex on October 30, 2006 crossed the magical figure of 13,000 and closed at 13,024.26

points, up 117.45 points or 0.9%. It took 135 days for the Sensex to move from 12,000 to 13,000 and 123 days

to move from 12,500 to 13,000.

5 December 2006 The Sensex on December 5, 2006 crossed the 14,000-mark to touch 14,028 points. It took 36days for the Sensex to move from 13,000 to the 14,000 mark.

6 July 2007 The Sensex on July 6, 2007 crossed the magical figure of 15,000 to touch 15,005 points in

afternoon trade. It took seven months for the Sensex to move from 14,000 to 15,000 points.

19 September 2007 The Sensex scaled yet another milestone during early morning trade on September 19,

2007. Within minutes after trading began, the Sensex crossed 16,000, rising by 450 points from the previous

close. The 30-share Bombay Stock Exchanges sensitive index took 53 days to reach 16,000 from 15,000. Nifty

also touched a new high at 4659, up 113 points.

The Sensex finally ended with a gain of 654 points at 16,323. The NSE Nifty gained 186 points to close at

4,732.

26 September 2007 The Sensex scaled yet another height during early morning trade on September 26, 2007.

Within minutes after trading began, the Sensex crossed the 17,000-mark . Some profit taking towards the end,

saw the index slip into red to 16,887down 187 points from the days high. The Sensex ended with a gain of

22 points at 16,921.

9 October 2007 The BSE Sensex crossed the 18,000-mark on October 9, 2007. It took just 8 days to cross

18,000 points from the 17,000 mark. The index zoomed to a new all-time intra-day high of 18,327. It finallygained 789 points to close at an all-time high of 18,280. The market set several new records including the

biggest single day gain of 789 points at close, as well as the largest intra-day gains of 993 points in absolute

term backed by frenzied buying after the news of the UPA and Left meeting on October 22 put an end to the

worries of an impending election.


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15 October 2007 The Sensex crossed the 19,000-mark backed by revival of funds-based buying in blue chip

stocks in metal, capital goods and refinery sectors. The index gained the last 1,000 points in just four trading

days. The index touched a fresh all-time intra-day high of 19,096, and finally ended with a smart gain of 640

points at 19,059.The Nifty gained 242 points to close at 5,670.

29 October 2007 The Sensex crossed the 20,000 mark on the back of aggressive buying by funds ahead of the

US Federal Reserve meeting. The index took only 10 trading days to gain 1,000 points after the index crossed

the 19,000-mark on October 15. The major drivers of todays rally were index heavyweights Larsen andToubro, Reliance Industries, ICICI Bank, HDFC Bank and SBI among others. The 30-share index spurted in the

last five minutes of trade to fly-past the crucial level and scaled a new intra-day peak at 20,024.87 points before

ending at its fresh closing high of 19,977.67, a gain of 734.50 points. The NSE Nifty rose to a record high

5,922.50 points before ending at 5,905.90, showing a hefty gain of 203.60 points.

8 January 2008 The sensex peaks. It crossed the 21,000 mark in intra-day trading after 49 trading sessions.

This was backed by high market confidence of increased FII investment and strong corporate results for the

third quarter. However, it later fell back due to profit booking.

13 June 2008 The sensex closed below 15,200 mark, Indian market suffer with major downfall from January21, 2008

25 June 2008 The sensex touched an intraday low of 13,731 during the early trades, then pulled back and ended

up at 14,220 amidst a negative sentiment generated on the Reserve Bank of India hiking CRR by 50 bps. FII

outflow continued in this week.

2 July 2008 The sensex hit an intraday low of 12,822.70 on July 2, 2008. This is the lowest that it has ever been

in the past year. Six months ago, on January 10, 2008, the market had hit an all time high of 21206.70. This is a

bad time for the Indian markets, although Reliance and Infosys continue to lead the way with mostly positive

results. Bloomberg lists them as the top two gainers for the Sensex, closely followed by ICICI Bank and ITC

Ltd.

6 October 2008 The sensex closed at 11801.70 hitting the lowest in the past 2 years.

10 October 2008 The Sensex today closed at 10527,800.51 points down from the previous day having seen an

intraday fall of as large as 1063 points. Thus, this week turned out to be the week with largest percentage fall in

the SenseX

18 May 2009 After the result of 15th Indian general election Sensex gained 21000.79 points from the previous

close of 12173.42, a record one-day gain. In the opening trade itself the Sensex evinced a 15% gain over the

previous close which led to a two-hour suspension in trading. After trading resumed, the Sensex surged again,

leading to a full day suspension of trading.

19 October 2010 BSE today introduced the 15-minute special pre-open trading session, a mechanism under

which investors can bid for stocks before the market opens. The mechanism, known as pre-open session call

auction, lasted for 15 minutes (from 9:00-9:15 am).


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1.3) Introduction to NSE:The National Stock Exchange (NSE) is India's leading stock exchange covering 364 cities and towns across the

country. NSE was set up by leading institutions to provide a modern, fully automated screen-based trading

system with national reach. The Exchange has brought about unparalleled transparency, speed & efficiency

safety and market integrity. It has set up facilities that serve as a model for the securities industry in terms of

systems, practices and procedures.

NSE has played a catalytic role in reforming the Indian securities market in terms of microstructure, market

practices and trading volumes. The market today uses state-of-art information technology to provide an efficien

and transparent trading, clearing and settlement mechanism, and has witnessed several innovations in products

& services viz. demutualization of stock exchange governance, screen based trading, compression of settlement

cycles, dematerialisation and electronic transfer of securities, securities lending and borrowing,

professionalization of trading members, fine-tuned risk management systems, emergence of clearing

corporations to assume counterparty risks, market of debt and derivative instruments and intensive use of

information technology.

The National Stock Exchange of India Limited has genesis in the report of the High Powered Study Group on

Establishment of New Stock Exchanges, which recommended promotion of a National Stock Exchange by

financial institutions (FIs) to provide access to investors from all across the country on an equal footing. Based

on the recommendations, NSE was promoted by leading Financial Institutions at the behest of the Government

of India and was incorporated in November 1992 as a tax-paying company unlike other stock exchanges in the

country. On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April

1993, NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. The Capital

Market (Equities) segment commenced operations in November 1994 and operations in Derivatives segment

commenced in June 2000.

Since its inception in 1992, National Stock Exchange of India has been at the vanguard of change in the Indian

securities market. This period has seen remarkable changes in markets, from how capital is raised and traded, to

how transactions are cleared and settled.

The market has grown in scope and scale in a way that could not have been imagined at the time. Average daily

trading volumes have jumped from ` 17 crore in 1994-95 when NSE started its Cash Market segment to `

16,959 crore in 2009-10. Similarly, market capitalization of listed companies went up from ` 363,350 crore at

the end of March 1995 to ` 6,009,173 crore at end March 2010. Indian equity markets are today among the most

deep and vibrant markets in the world.

NSE offers a wide range of products for multiple markets, including equity shares, Exchange Traded Funds

(ETF) , Mutual Funds, Debt instruments, Index futures and options, Stock futures and options, Currency futures

and Interest rate futures. Our Exchange has more than 1,400 companies listed in the Capital Market and more

than 92% of these companies are actively traded. The debt market has 4,140 securities available for trading

Index futures and options trade on four different indices and on 190 stocks in stock futures and options as on

31st March , 2010. Currency futures contracts are traded in four currency pairs. Interest Rate Futures (IRF)


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contracts based on 10 year 7% Notional GOI Bond are also available for trading.

Incorporation and management:-

NSE was incorporated in November 1992, and received recognition as a stock exchange under the Securities

Contracts (Regulation) Act, 1956 in April 1993. It is managed by professionals who do not directly or indirectly

trade on the Exchange. The trading rights are with trading members who offer their services to the investors.

The Board of NSE comprises of senior executives from promoter institutions and eminent professionalswithout having any representation from trading members. While the Board deals with the broad policy issues,

the Executive Committees (ECs), which include trading members, formed under the Articles of Association and

the Rules of NSE for different market segments, set out rules and parameters to manage the day-to-day affairs

of the Exchange. The day-to-day management of the Exchange is delegated to the Managing Director who is

supported by a team of professional staff. Therefore, though the role of trading members at NSE is to the extent

of providing only trading services to the investors, the Exchange involves trading members in the process of

consultation and participation in vital inputs towards decision making.

NSE provides a trading platform for of all types of securities for investors under one roofEquity, Corporate

Debt, Central and State Government Securities, T-Bills, Commercial Paper (CPs), Certificate of Deposits

(CDs), Warrants, Mutual Funds (MFs) units, Exchange Traded Funds (ETFs), Derivatives like Index Futures,

Index Options, Stock Futures, Stock Options Currency Futures and Interest Rate Futures. The Exchange

provides trading in 4 different segments viz., Wholesale Debt Market (WDM) segment, Capital Market (CM)

segment, Futures & Options (F&O) segment and the Currency Derivatives Segment (CDS).

Achievements and Milestones:-


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1.3.1) Timeline of NSE

Month/Year Event

November 1992 Incorporation

April 1993 Recognition as a stock exchange.

June 1994 WDM segment goes live.

November 1994 CM segment goes live through VSAT.

October 1995 Became largest stock exchange in the country.

April 1996 Commencement of clearing and settlement by NSCCL.

April 1996 Launch of S&P CNX Nifty.

November 1996 Setting up of National Securities Depository Ltd., first

depository in India, co-promoted

by NSE.

December 1996 Commencement of trading/settlement in dematerialised

securities.

December 1996 Launch of CNX Nifty Junior.

May 1998 Promotion of joint venture, India Index Services & ProductsLimited (IISL) (along with CRISIL for services.

May 1998 Launch of NSEs Web-site : www.nseindia.com.

July 1998 Launch of NSEs Certification Programme in Financial

Markets (NCFM)

October 1999 Setting up of NSE.IT Ltd.

June 2000 Commencement of Derivatives Trading (in Index Futures).

September 2000 Launch of Zero Coupon Yield Curve.

June 2001 Commencement of Trading in Index Options

July 2001 Commencement of Trading in Options on IndividualSecurities

November 2001 Commencement of Trading in Futures on Individual

Securities

January 2002 Launch of Exchange Traded Funds (ETFs).

August 2003 Launch of Futures and Options on CNX IT Index

June 2005 Launch of Futures & Options on BANK Nifty Index

August 2006 Setting up of NSE Infotech Services Ltd.

December 2006 Derivative Exchange of the Year, by Asia Risk magazine

March 2007 Launch of Gold BeES- Exchange Traded Fund (ETF).(First

Gold ETF)

January 2008 Launch of Mini Nifty derivative contracts

March 2008 Launch of long term option contracts on S&P CNX Nifty

Index.

April 2008 Launch of Securities Lending & Borrowing Scheme

April 2008 Launch of - India VIX* - The Volatility Index

April 2008 Direct Market Access (DMA)


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June 2008 Setting up of Power Exchange India Ltd.

July 2008 Launch of NOW Neat on Web

August 2008 Launch of Currency Derivatives Segment with

commencement of trading on Currency

Futures on August 29, 2008.

September 2008 Launch of ASBA (Applications supported by Blocked

Amount)

February 2009 Cross Margining Benefit in CM and F&O Segment

March 2009 Launch of NSE E-Bids for Debt Segment

August 2009 Launch of Interest Rate Futures

November 2009 Launch of Mutual Fund Service System

December 2009 Commencement of settlement of corporate bonds

February 2010 Trading in Currency Futures on additional currency pairs

February 2010 Listing of Hang Seng BeES ETF on NSE

March 2010 NSE and CME Group announced cross-listing relationship

March 2010 NSE and Singapore Exchange sign Memorandum of

Understanding (MOU)April 2010 NSE and NSCCL receive Asian Banker awards


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2.1) Technology and application of it in stock market

Technology has been the backbone of the Exchange. Providing the services to the investing community and the

market participants using technology at the cheapest possible cost has been its main thrust. NSE chose to

harness technology in creating a new market design. It believes that technology provides the necessary impetus

for the organization to retain its competitive edge and ensure timeliness and satisfaction in customer service. In

recognition of the fact that technology will continue to redefine the shape of the securities industry, NSE

stresses on innovation and sustained investment in technology to remain ahead of competition. NSE is the first

exchange in the world to use satellite communication technology for trading. It uses satellite communication

technology to energize participation from about 2,493 VSATs from nearly 185 cities spread all over the

country.

Its trading system, called National Exchange for Automated Trading (NEAT), is a state of-the-art client server

based application. At the server end all trading information is stored in an in-memory database to achieve

minimum response time and maximum system availability for users. It has uptime record of 99.999%. For

orders entered by the user, the response time within trading system is around 5ms. NSE has been continuously

undertaking capacity enhancement measures so as to effectively meet the requirements of increased users andassociated trading loads. NSE has also put in place NIBIS (NSEs Internet Based Information System) for on-

line real-time dissemination of trading information over the Internet.

As part of its business continuity plan, NSE has established a disaster back-up site at Chennai along with its

entire infrastructure, including the satellite earth station and the high-speed optical fi ber link with its main site

at Mumbai. This site at Chennai is a replica of the production environment at Mumbai. The transaction data is

backed up on near real time basis from the main site to the disaster back-up site through the 3 STM-4 (1.86 GB)

high-speed links to keep both the sites all the time synchronized with each other. The various application

systems that NSE uses for its trading as well clearing and settlement and other operations form the backbone of

the Exchange. The application systems used for the day-to-day functioning of the Exchange can be divided into(a) Front end applications and (b) Back offi ce applications.

The various application systems that NSE uses for its trading as well clearing and settlement and other

operations form the backbone of the Exchange. The application systems used for the day-to-day functioning of

the Exchange can be divided into (a) Front end applications and (b) Back offi ce applications. In the front offi

ce, there are 7 applications:

NEAT-CM system takes care of trading of securities in the Capital Market segment that includes equities

debentures/notes as well as retail Gilts. The NEATCM application has a split architecture wherein the split is

on the securities and users. The application runs on three Stratus systems with communication over TCP IP

protocol. The application has been benchmarked to support 60,000 users and handle more than 30 million trades

daily. This application also provides data feed for processing to some other systems like Index, OPMS through

TCP/IP. This is a direct interface with the trading members of the CM segment of the Exchange for entering the

orders into the main system. There is a two way communication between the NSE main system and the front

end terminal of the trading member.


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NEAT-WDM system takes care of trading of securities in the Wholesale Debt Market (WDM) segment that

includes Gilts, Corporate Bonds, CPs, T-Bills, etc. This is a direct interface with the trading members of the

WDM segment of the Exchange for entering the orders/trades into the main system. There is a two way

communication between the NSE main system and the front end terminal of the trading member.

NEAT-F&O system takes care of trading of securities in the Futures and Options (F&O) segment that includes

Futures on Index as well as individual stocks and Options on Index as well as individual stocks. This is a direct

interface with the trading members of the F&O segment of the Exchange for entering the orders into the mainsystem. There is a two way communication between the NSE main system and the front end terminal of the

trading member.

Neat-IPO system is an interface to help the initial public offering of companies which are issuing the stocks to

raise capital from the market. This is a direct interface with the trading members of the CM segment who are

registered for undertaking order entry on behalf of their clients for IPOs.

NSE uses the NEAT IPO system that allows bidding in several issues concurrently. There is a two way

communication between the NSE main system and the front end terminal of the trading member.

NEAT MF system is an interface with the trading members of the CM segment for order collection of

designated Mutual Funds units

NEAT- CD system provides interface for trading in currency derivatives and Interest Rate Futures

NEATPLUS NSE is offering a multi-market front end application NEATPlus to its members. This application

provides a common trading platform to NSE members to trade in Capital Market as well as Futures and Options

Market segments at NSE. Members can take login in CM and F&O segments in a single terminal with ability to

monitor and trade in Equity securities as well as Equity derivatives from single screen. Members can use the

existing VSAT/Leased Line connectivity for accessing the NEATPlus application. Multiple market watchscreens with Excel like features, ability to select various fonts, customizable color schemes and themes are

some of the other salient features of the NEATPlus application.

The exchange also provides a facility to its members to use their own front end software through the CTCL

(computer to computer link) facility. The member can either develop his own software or use products

developed by CTCL vendors.

In the back office, the following important application systems are operative:

Nationwide Clearing and Settlement System NCSS is the clearing and settlement system of the NSCCL for the

trades executed in the CM segment of the Exchange. The system has 3 important interfaces OLTL (Online

Trade loading) that takes each and every trade executed on real time basis and allocates the same to the clearing

members, Depository Interface that connects the depositories for settlement of securities and Clearing Bank

Interface that connects the 13 clearing banks for settlement of funds. It also interfaces with the clearing

members for all required reports. Through collateral management system it keeps an account of all available

collaterals on behalf of all trading/ clearing members and integrates the same with the position monitoring of


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the trading/ clearing members. The system also generates base capital adequacy reports.

Future and Options Clearing and Settlement System (FOCASS) is the clearing and settlement system of the

NSCCL for the trades executed in the F&O segment of the Exchange. It interfaces with the clearing members

for all required reports. Through collateral management system it keeps an account of all available collaterals

on behalf of all trading/clearing members and integrates the same with the position monitoring of the

trading/clearing members. The system also generates base capital adequacy reports.

Currency Derivatives Clearing and Settlement System (CDCSS) is the clearing and settlement system for trades

executed in the currency derivative segment. Through collateral management system it keeps an account of all

available collateral on behalf of all trading /clearing members and integrates the same with the position

monitoring of the trading/clearing members. The System also generates base capital adequacy report.

Surveillance system offers the users a facility to comprehensively monitor the trading activity and analyze the

trade data online and offline

Online Position Monitoring System (OPMS) OPMS is the online position monitoring system that keeps track of

all trades executed for a trading member vis--vis its capital adequacy.

Parallel RISk Monitoring System (PRISM) is the parallel risk management system for F&O trades using

Standard Portfolio Analysis (SPAN). It is a system for comprehensive monitoring and load balancing of an

array of parallel processors that provides complete fault tolerance. It provides real time information on initial

margin value, mark to market profi t or loss, collateral amounts, contract-wise latest prices, contract-wise open

interest and limits. The system also tracks online real time client level portfolio base upfront margining and

monitoring.

Parallel RISk Monitoring System Currency Derivatives (PRISM-CD) is the risk management system of thecurrency derivatives segment. It is similar in features to the PRISM of F&O Segment.

Data warehousing that is the central repository of all data in CM as well as F&O segment of the Exchange.

Listing system captures the data from the companies which are listed in the Exchange for corporate governance

and integrates the same to the trading system for necessary broadcasts for data dissemination process.

Membership system that keeps track of all required details of the Trading Members of the Exchange.

The exchange operates and manages a nationwide network. This network includes 9 POPs (Points of Presence)

setup across the country and catering to 3070+ leased lines. All the POPs are connected to DC and DR over

high Speed links (Mainly STMs). All the members are given a 2mb point to point connection to the nearest

POP. All the members have a choice of selecting the POPs based on their office location. Also there are plans

to setup additional POPs based on member requirements. The old X.25 VSAT and Leased Line network has

been decommissioned completely.


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NSEs existing POPs are build on highly redundant infrastructure connecting to Core and DR setup via high

speed redundant backbone links from multiple service providers. Mini POP with low connectivity requirement

is fully owned and operated by NSE is proposed to be built in with redundant Infrastructure at Rajkot. Member

links would terminate at Mini POP and the traffic would be routed via a dual backbone pipe to nearby Mini

POP. In keeping up with the global trends the Exchange is providing to its members a co-location facility for

their DMA and ALGO IT infrastructure at NSEIL premises in BKC shortly.

NOW

NSE is also offering internet based trading services to NSE members. This facility is branded as NOW Neat on

Web NOW provides an internet portal for NSE members and their authorized clients to transact orders and

trades to the various market of NSE viz. CM, F&O and Currency. The members can also access NOW through

their existing VSAT/ Leased line, in addition to internet links. The various features provided by NOW are (a)

comprehensive Administration features, flexible risk management system, high speed dealer terminals and

online trading facility for investors.


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2.2) Use of MIS in Stock Market

What is MIS?

MIS refers broadly to a computer-based system that provides managers with the tools for organizing, evaluating

and efficiently running their departments.

What is the purpose of MIS?

Right Information To the right person At the right place At the right time In the right form At the right cost.

Information is Critical

The information we have is not what we want, the information we want is not the information we need, the

information we need is not available.

Functional uses of MIS

Enhance:

Quality of our operationsQuality of our services

We achieve:

Efficiency

Transparency

Speedy Decision making


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2.3) NSE and its components

NSCCL

The National Securities Clearing Corporation Ltd. (NSCCL), a wholly-owned subsidiary of NSE, was

incorporated in August 1995 and commenced clearing corporation in April 1996. It was the first clearing

corporation in the country to provide novation/settlement guarantee that revolutionized the entire concept of

settlement system in India. It was set up to bring and sustain confidence in clearing and settlement of securities

to promote and maintain short and consistent settlement cycles; to provide counter-party risk guarantee, and to

operate a tight risk containment system. It carries out the clearing and settlement of the trades executed in the

equities and derivatives segments of the NSE. It operates a well-defined settlement cycle and there are no

deviations from the same. It is the first clearing corporation in the country to establish the Settlement Guarantee

Fund (SGF) in June 1996. It has been managing, clearing and settlement functions sinceits inception without a

single failure or clubbing of settlements. NSCCL has also introduced the facility of direct payout to clients

account on both the depositories viz., NSDL and CDSL.

Today NSCCL settles trades under the T+2 rolling settlement. It has the credit of continuously upgrading the

clearing and settlement procedures and has also bought Indian financial markets in line with internationalmarkets

NSDL

To promote dematerialization of securities NSE joined hands with UTI and IDBI to set up the first depository in

India called the National Securities Depository Limited (NSDL). The depository system gained quick

acceptance and in a very short span of time it was able to achieve the objective of eradicating the paper from the

trading and settlement of securities, and was also able to get rid of the risks associated with

fake/forged/stolen/bad paper. Dematerialized delivery today constitutes almost 100% of total of the total

delivery based settlement.

NSE Infotech Services Ltd

NSE Infotech Services Ltd Information Technology has been the back bone of conceptualization, formation

running and the success of National Stock Exchange of India Limited (NSE). NSE has been at the forefront in

spearheading technology changes in the securities market. It was important to give a special thrust and focus on

Information Technology to retain the primacy in the market. Towards this a wholly owned subsidiary M/s. NSE

Infotech Services Limited (NSETECH) was incorporated to cater to the needs of NSE and all its group

companies exclusively.

NSE.IT

NSE.IT Limited, a 100% subsidiary of NSE was setup in 1999 to provide thrust to NSEs technology edge

concomitant with its overall goal of harnessing latest technology for optimum business use. A Vertical

Specialist Enterprise, NSE.IT offers end-to-end Information Technology (IT) products, solutions and services

NSE.IT has expertise in a wide range of business applications including high-end mission critical applications

requiring real-time processing speeds. Additionally, NSE.IT specializes in providing complete IT solutions to

Stock Exchanges, Clearing Corporations, Brokerage Firms, Insurance Firms and other organizations in the


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financial sector. NSE.IT is focused on developing mission-critical technology solutions for the Financial

Services market and the facilitation of change within these markets.

IISL

India Index Services and Products Limited (IISL), a joint venture of CRISIL and NSE, was set up in May 1998

to provide indices and index services. It has a licensing and marketing agreement with Standard and Poors

(S&P), the worlds leading provider of investible equity indices, for co-branding equity indices. IISL is Indiasfirst specialized company focusing upon the index as a core product. It provides a broad range of services

products and professional index services. It maintains over 96 equity indices comprising broad-based

benchmark indices, sectoral indices and customized indices. Many investment and risk management products

based on IISL indices have developed in the recent past, within India and abroad. These include index based

derivatives on NSE and on Singapore Exchange, Indias first exchange traded fund, a number of index funds

and Licensing of the Index for various structured products.

DOTEX INTERNATIONAL LTD.

The data and info-vending products of NSE are provided through a separate company DotEx International Ltd.

a 100% subsidiary of NSE, which is a professional set-up dedicated solely for this purpose. DotEx data provides

products like : On-line streaming data feed, Intra-day Snapshot data feed, end of day data and Historical Data.

NCDEX

NSE joined hand with other financial institutions in India to promote the NCDEX which provides for a world

class commodity exchange platform for Market Participants to trade in wide spectrum of commodity

derivatives. It was incorporated in the year 2003. Currently NCDEX facilitates trading of agro based

commodities, precious metal, base metal, energy products and polymers.

NCCL

National Commodity Clearing Limited (NCCL) is a company promoted by National Stock Exchange of India

Limited (NSEIL). It was incorporated in the year 2006. One of the objectives of NCCL is to provide and

manage clearing and settlement, risk management and collateral management services to commodity exchanges

NCCL is having the requisite experience and exposure in providing clearing and settlement facility, risk and

collateral management services in the commodities market including funds settlement with multiple clearing

banks. Currently NCCL is providing clearing and settlement services to NCDEX.

PXIL

A National Level Power Exchange by the name of Power Exchange India Limited (PXIL) has been set up

through a Joint Venture by India's two leading Exchanges, National Stock Exchange of India Ltd (NSE) and

National Commodity & Derivatives Exchange Ltd (NCDEX). PXIL has got the in-principle approval from

CERC to set up and operate the power exchange and will operate as a National Level electricity exchange

covering the entire Indian electricity market.


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3.1) Use of IT in current stock market

Home Page

After implementation of Information Technology (IT), As everything was revolutionized and turned into real

time buying and selling of shares with the help of internet. First screen that appears when an user logs in is the

Home screen that shows the various shares along with their current market price. The above snap is taken from

SIHL displaying the home screen of user when he/she logins in. Now as before there is no need to go physically

to the market and buy shares.


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Market Watch

Market Watch displays the shares that are traded in the market currently in the market. It displays the details of

each share like the current price, high price of the day, low price of the day, increase / decrease in the price of

the day. After IT, a person can know the trend of any share at the tip of the click. It was not possible before

online trading. Hence, IT has enhanced the field of stock market.


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Limit Setting

An advanced feature called limit setting which enables user to set the upper limit of the price and lower limit of

the price. This is an advanced feature designed for the users who cant keep the watch on the market everymoment. So by the use of this feature they can create a limit for the price in order to reduce loss and control the

amount of gain.


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Order Book

Order book is the replacement of the calling system that existed in traditional physical stock market. Now by

the inclusion of the order book any person having DMAT account can place an order in market with the help of

order book feature which needs detail of share, no. of shares to be purchased, order type, product type, quantity

of shares.


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Portfolio

Portfolio feature is an additional value that is being created by IT. It shows the various shares that a person has

purchased in his account. It also shows the current price of the share along with the individual gain and loss

attached with each share. It also specifies the quantity of share that a person holds with days gain/loss and

overall gain/loss.


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Trade Book

Trade book shows the orders that are executed as well as the pending orders which are yet to be excuted and

pending in the market. It shows how much quantities the buyer has requested to purchase or it also shows no. of

stocks that had been sold during the day or had been placed to sell. Before a particular used to maintain the

stock certificates in order to maintain the record of shares that person has purchased.


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Stock View

Stocks view a feature that enables the user to know about the stocks traded today by the person related to the

sale of the stock. It is an in-depth detail of the sale of the stocks. It shows the available stocks, blocked stocks,free with pool, value of the stock.


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Different Functions

Auto fit All: - It fills the compatible data on the behalf of user. Add Script / Contract :- If any detail about the stock is to be added then the special feature enabled by

IT is called Add script / contract.

Buy Order: - A shortcut feature to see the buy order placed by the person. Sell Order: - A shortcut feature to see the sale order placed by the person. Save Profile: - The shortcut that saves your portfolio after you make changes in your portfolio. Best Five: - The feature that enables a user to know the best five stocks performing for the day.


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Chart-Demo

Above is the feature available due to use of IT, it shows the movement of stock X for the month. It also shows

the movement of price during that month. It displays the top price for the stock X during this month alongwith the lowest price of stock X for the month. The best part of this feature is that the movement in price can

be known for the day, week, month and year.


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Conclusion


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Bibliography

http://www.ehow.com/list_7224428_technology-information-systems-stock-market.html

http://earnprofitinstockmarket.wordpress.com/history-of-indian-stock-market/

http://www.timetoast.com/timelines/history-of-the-stock-market--4

https://net.sihlnettrade.com/shah/Trading/NetNet.aspx?enc=L1ZcBufRzQSSb5GPdI7HwPsLC

AWiCTRl5FN7Hm7Magqhx2yriGBUK9zj9zMkM0jd7tkN5ftWdY37iu1lKEsuoFOcouFndk4g

omgQf5JxCYI=
http://www.ehow.com/list_7224428_technology-information-systems-stock-market.htmlhttp://www.ehow.com/list_7224428_technology-information-systems-stock-market.htmlhttp://earnprofitinstockmarket.wordpress.com/history-of-indian-stock-market/http://earnprofitinstockmarket.wordpress.com/history-of-indian-stock-market/http://www.timetoast.com/timelines/history-of-the-stock-market--4http://www.timetoast.com/timelines/history-of-the-stock-market--4https://net.sihlnettrade.com/shah/Trading/NetNet.aspx?enc=L1ZcBufRzQSSb5GPdI7HwPsLCAWiCTRl5FN7Hm7Magqhx2yriGBUK9zj9zMkM0jd7tkN5ftWdY37iu1lKEsuoFOcouFndk4gomgQf5JxCYIhttps://net.sihlnettrade.com/shah/Trading/NetNet.aspx?enc=L1ZcBufRzQSSb5GPdI7HwPsLCAWiCTRl5FN7Hm7Magqhx2yriGBUK9zj9zMkM0jd7tkN5ftWdY37iu1lKEsuoFOcouFndk4gomgQf5JxCYIhttps://net.sihlnettrade.com/shah/Trading/NetNet.aspx?enc=L1ZcBufRzQSSb5GPdI7HwPsLCAWiCTRl5FN7Hm7Magqhx2yriGBUK9zj9zMkM0jd7tkN5ftWdY37iu1lKEsuoFOcouFndk4gomgQf5JxCYIhttps://net.sihlnettrade.com/shah/Trading/NetNet.aspx?enc=L1ZcBufRzQSSb5GPdI7HwPsLCAWiCTRl5FN7Hm7Magqhx2yriGBUK9zj9zMkM0jd7tkN5ftWdY37iu1lKEsuoFOcouFndk4gomgQf5JxCYIhttps://net.sihlnettrade.com/shah/Trading/NetNet.aspx?enc=L1ZcBufRzQSSb5GPdI7HwPsLCAWiCTRl5FN7Hm7Magqhx2yriGBUK9zj9zMkM0jd7tkN5ftWdY37iu1lKEsuoFOcouFndk4gomgQf5JxCYIhttps://net.sihlnettrade.com/shah/Trading/NetNet.aspx?enc=L1ZcBufRzQSSb5GPdI7HwPsLCAWiCTRl5FN7Hm7Magqhx2yriGBUK9zj9zMkM0jd7tkN5ftWdY37iu1lKEsuoFOcouFndk4gomgQf5JxCYIhttp://www.timetoast.com/timelines/history-of-the-stock-market--4http://earnprofitinstockmarket.wordpress.com/history-of-indian-stock-market/http://www.ehow.com/list_7224428_technology-information-systems-stock-market.html


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MIS-1-share broking in information system

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